CMA announces investigation into Unilever’s green claims

On 12 December 2023 the Competition and Markets Authority (CMA) announced that it is investigating green claims made by Unilever for some of its household products which include certain cleaning products and toiletries. The CMA is concerned that Unilever may be exaggerating the green credentials for these products by using vague and broad claims, unclear statements and the use of misleading images.

This follows on from the CMA’s investigation into the fast-moving consumer goods sector more widely, launched in January this year, during which the CMA has uncovered a number of practices that give cause for concern.

The CMA’s press release announcing this latest investigation flags the following specific concerns over Unilever’s green claims:

• The use of vague and broad statements and language that may mislead consumers about the environmental impact of the products.
• The way claims about certain ingredients are presented, which may exaggerate how natural the product is and give an inaccurate and misleading impression.
• Focus on a single aspect of the product which may give the impression that the whole product is environmentally friendly.
• Claims around recyclability of the product which are unclear and fail to specify whether they relate to all or part of a product or of its packaging.
• Use of colours or images that may create the impression that the products are more environmentally friendly than they are.

Next steps

The CMA is now gathering further information in order to carry out a detailed investigation. The main consumer protection legislation relevant to misleading green claims practices are the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). The CPRs contain a general prohibition against unfair commercial practices and specific prohibitions against misleading actions and misleading omissions. If the CMA concludes there has been a breach of the legislation it may decide to obtain undertakings from Unilever to change the way it operates or to apply for an enforcement order from a civil court.

Once the Digital Markets, Competition and Consumer Bill, which is currently before Parliament, is adopted the CMA will have new direct enforcement powers to enforce breaches of the CPRs as opposed to going to through the courts.  When finding a breach of the rules it will be able to impose fines of up to 10% of annual global turnover of the businesses involved.

The CMA’s Green Claims Code

The CMA’s Green Claims Code, published in September 2021, contains guidance aimed at helping businesses understand and comply with their existing consumer protection obligations when making environmental claims.

The Guidance sets out six principles which reflect the requirements of existing consumer protection law in the context of environmental claims. Businesses are required to ensure their claims:

• Are truthful and accurate.
• Are clear and unambiguous.
• Do not omit or hide important information.
• Compare goods or services in a fair and meaningful way.
• Consider the full life cycle of the product or service.
• Are substantiated.

The Code expands on what these principles mean and contains a number of worked examples in order to illustrate how these principles would apply in practice.

Continued focus on green claims

Since publishing the Code the CMA has also launched an investigation into the fashion sector, followed by more targeted investigations into fashion brands ASOS, Boohoo and George at Asda, scrutinising their green claims in marketing products to consumers. More recently the CMA opened an investigation into green claims made by a boiler company over concerns that it may be misleading consumers in its marketing of boilers as “hydrogen-blend ready”.  This investigation is part of the CMA’s wider work around consumer protection issues in the green heating and insulation sector.

The CMA has also indicated that it intends to continue its wider scrutiny of misleading green claims in relation to other sectors such as potentially the transport and travel sectors. The CMA’s focus on greenwashing and misleading green claims was set out in its 2023/2024 Annual Plan and broadening its green claims work is also listed as a key priority in the CMA’s draft 2024/2025 Annual Plan.